NY times interview with J Allard : Articles 1 , 2 , 3

It is easy to get subscriptions right, if we could reinvent rights. If we had full rights to every piece of music recorded since the beginning of time, and we could choose what to do with it, we could build a dynamite service….

It would be free and available on every device…. There would be advertising. Or it would be a loss leader to a higher value proposition.

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The music industry is very healthy. The record industry is the problem. The notion that the only way to monetize artist creation is 10 songs that come out every 18 months, in a package called an album — the classic record model — isn’t what it used to be. [Musicians can profit from] reality shows. Fashion. Maybe I release five or six tracks and the rest comes in a paid subscription, that is basically a fan club…. Most labels are going to become management companies [making money from booking concerts, etc. rather than selling CDs.] There will be a lot of pain.

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The Zune guys have to run really fast. The Windows Mobile guys are on a two-year release cycle. The Xbox team now needs to focus on cost reduction, distribution and quality process. Everyone is on their own cadence. The one thing that transcends all this is the network as the nexus.

If you are in an MP3 aisle, we want to be the connected MP3 player. That’s mainly connecting artist and audience together, mostly around the culture of music. Yes, we’ll do video. Yes, we’ll do games. But the heart and soul of that brand is music.

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The phone will be one part entertainment…. What you will see from us is more of these signature experiences. When you see the Zune, you’ll say say, I want my music experience on the phone to be like that. Hey, I want my telecommunication experience on the phone to be more like that.